Video address
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Ladies and Gentlemen, I’m sorry I can't be with you in person to address AGEA's annual Conference.
I am pleased to hear that this event is being attended by so many delegates attracting a growing interest from Australia and abroad.
Despite being unable to attend, I do want to say a few words about upcoming challenges and opportunities for the geothermal industry as I see them.
We all appreciate geothermal’s potential to provide baseload renewable electricity.
Few renewable energy sources provide such promise.
Australia is home to an extensive geothermal resource, unfortunately though, for unconventional geothermal this potential is yet to be realised.
At present, the industry is faced with a real catch-22.
- Investors are reluctant to invest in geothermal until it is proven, and conversely, it cannot be proven until investors are willing to invest.
This situation has been exacerbated by tightening financial markets through the Global Financial Crisis and now the economic volatility in Europe.
Like all new technologies, geothermal's development requires investors who are willing to take a risk.
The Australian Government believes that at these early stages of technology development there is a role for both government and industry to share in these risks.
By sharing in the risks, together, we can accelerate technology development.
That is what the Australian Government is doing with its Clean Energy Future Package.
We are supporting the transition over time to a lower emissions electricity generation sector by putting in place a market mechanism to drive investment, and at the same time supporting the research, development and commercialisation of emerging renewable technologies.
Provided we make the necessary technological breakthroughs and overcome current cost barriers, technologies like geothermal have the potential to be a significant source of clean baseload electicity.
As you would most likely be aware, the Government’s carbon price package passed the Australian Parliament last week.
This will see a carbon price of $23 introduced from July next year providing a long term price signal to invest in low emission and renewable technologies.
Legislation has also passed to establish the Australian Renewable Energy Agency (ARENA).
Recognising the need to support emerging technologies the Government, through ARENA, has consolidated $3.2 billion dollars to pull renewable energy technologies from research and development through to deployment and commercialisation.
ARENA brings together existing bodies, such as the Australian Centre for Renewable Energy (ACRE), and $1.7 billion of uncommitted funds to support a variety of renewable energy projects.
Independent of Government, ARENAs funding is locked-in and cannot be accessed at some future point by Government.
A board of experts with renewable energy, business investment and corporate governance experience will be responsible for determining how this funding is best allocated to support the development of renewable energy technology.
The Australian Government’s support does not stop there.
We will also introduce a $10 billion Clean Energy Finance Corporation to begin operating from 2013-14.
The CEFC will see the Government step into a new space with respect to its support for clean energy technologies.
It will support the commercialisation and deployment clean energy technologies through a variety of funding means such as loans and equity investments.
In addition, from 1 July next year, we intend to introduce an immediate tax deduction that will apply towards the exploration of geothermal energy sources.
The deduction will help remove barriers to investment and improve the economics of geothermal exploration.
The Australian Government is committed to providing the framework needed to move to a clean energy future.
But to the present day.
Our Emerging Renewables program has been up and running since August.
It offers $126 million to support innovative renewable energy technology, with at least a third of this funding expected to support the geothermal sector.
The program has no set funding rounds, so you can apply at any time.
ACRE is expected invite the first tranche of successful applicants to submit full funding applications before the end of the year.
Successful projects will be assessed on their merits by ACRE, not Government.
With all this support I simply say, there is no better time to invest in renewable energy technology in Australia.
The Government has put in place a comprehensive framework to develop technologies such as geothermal, and it will now be up to the private sector to play their part.
With Government and industry working in cooperation there are plenty of reasons to be optimistic about geothermal's future.
With that in mind I wish you every success for the forthcoming year.
Thank you